Singapore tops Tokyo as most expensive city to live in 2014

Singapore bested 131 cities globally to become the world’s most expensive city, toppling Tokyo as stronger currency, higher cost of ownership and soaring prices make the island nation the costliest place to live in 2014.

According to the Economist Intelligence Unit’s latest Worldwide Cost of Living Survey, Singapore jumped five spots from last year, driven by higher cost of living due in part by the influx of foreigners.

Paris was second most expensive, followed by Oslo, Zurich and Sydney. London ranked 15th, while Tokyo dropped to sixth place.

“Despite Abenomics driving consumer confidence and price inflation, a weaker yen has pushed … Tokyo away from the top of the cost of living ranking,” the EIU said.

“This has paved the way for Singapore … to claim the unenviable title of the world’s most expensive city.”

Annual per capita income in Singapore, smaller in size than New York City, is well-above $50,000, one of the highest for any country in Asia. But the figure masks increasing income inequality that has become a glaring concern for the city-state’s government.

Home prices skyrocketed in recent years and few of Singapore’s 5.3 million citizens can afford a car. Parallel to soaring prices is the proliferation of luxury shopping malls to cater to well-heeled Singaporeans and foreigners.

The city’s transport costs are almost three times higher than New York, and it is the most expensive place to buy clothes globally as retailers import luxury European brands, the EIU said.

Ownership of cars are strictly regulated to prevent congestion on Singapore’s already crowded streets. Potential car owners must pay for excise and registration duties that more than double the vehicle’s market value.

“Compared to other countries, car prices are at an astronomical level,” said Michael Wan, a Singapore-based economist at Credit Suisse Group AG. “The labor market is tight and moving forward, we think inflation will be much more of a concern over the next two years.”

The EIU survey compared more than 400 individual prices across 160 products and services in 140 cities in 93 countries.